AUGUSTA, Maine — Next year, tens of thousands of Maine employees could be eligible for more overtime pay.
A proposed rule change under the Federal Labor Standards Act would affect certain employees who earn up to about $50,000 per year.
What some characterize as a long-overdue boon for workers, others say is a seismic shift for employers and workplace culture.
The proposed federal rule change would essentially more than double the earning threshold for overtime pay. Right now, those earning below $23,660 per year are eligible.
“If anyone is making below $50,440 a year, they will be entitled to overtime for any hour worked over 40 in a given work week,” said Gregg Frame, a Portland lawyer, on the proposed changes.
And that $50,440 level would actually ratchet up every year.
“This restores overtime protections that have been lost to inflation,” said Matt Schlobohm, executive director of the Maine AFL-CIO. “If you go back in time, most workers were covered by these kinds of protections. And that has been chipped away at, and chipped away at, and chipped away at, and I think most people would agree that it’s just wrong if you’re working 50 or 60 or 70 hours that you’re not compensated in any way for that.”
It has been 11 years since federal overtime regulations were updated.
Julie Rabinowitz of the Maine Department of Labor said that while the state wants employee wages to increase, it opposes this rule change.
“It’s just going to get messy before it gets better,” she said.
Rabinowitz said the jump in the wage threshold is too much, too fast. She said it’s going to be a particularly tough hit to employers in Maine, which is in the 40th percentile for wages nationally.
“So Maine, where we have below-average wages, is going to have more employers who have positions that fall underneath that $50,000 mark and are going to have a more difficult time because they’re going to have more people they have to make the pay difference with to get to $50,000.”
That is, if that employer wants to make their employees exempt from the regulation, she said.
But if some employees continue to earn below $50,000, said Chris Hall of the Portland Chamber of Commerce, the new rule creates an administrative puzzle.
“In the world of email and texting and 24/7 connectivity, when does work stop?” Hall said. “And if someone is only allowed to work 40 hours a week, if they go home and do email for two hours, does that mean they have to be paid overtime for those two hours? How do you track it, how do you manage it as an employer, and what happens if you don’t?”
Tony Payne of Clarke Insurance said employers can turn to one level of protection, in the form of employee practice liability insurance that’s endorsed for Fair Labor Standards Act claims.
“And what that kind of insurance does is it adds to your insurance policy with a supplement of up to $100,000, so that really gives you a great amount of protection,” Payne said.
Another complexity for employers is that certain jobs, usually of the managerial type, are exempt from overtime requirements. Frame said employers need to comb through job descriptions to make sure employees that are exempt from overtime aren’t performing any duties that would make them eligible.
Even though the proposed rule hasn’t been finalized, Frame expects it will be adopted by early next year, and employers must prepare.
“It’s a classic case here of forewarned is forearmed,” he said.
The Maine Department of Labor says employers who have questions about complying with the proposed rule should contact the department or consult with an attorney.
This article appears through a media partnership with Maine Public Broadcasting Network.